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This Blog is dedicated to making public some of the business activities and methods of Liam Collins, David Bone Jr and their associates. In the spring of 2010, the present authors invested in Collins & Bone (C&B), who were offering an enticing 8-10% interest on the basis of buying houses for cash, renovating them and letting them out to students. We were assured that our money was secured against houses that they owned, including their own homes and the properties held by their associated company, Castle & Gatehouse (C&G). We have emails and brochures that confirm these details, as do others who invested on this same basis at around the same time. The idea worked for us for over a year, then in November 2011 they told us they were insolvent. They refused our every request for clear accounts, which led us to suspect wrongdoing. We began an investigation and then started this Blog. We found our suspicions confirmed: other investors had lost sometimes quite large amounts to C&B and its predecessor CBS, and all requests for repayment were adamantly refused. These people use and have used so many names that we found it necessary to compress them into CoBo (for Collins & Bone) and Coboco (for the whole bunch of them – there are quite a few!) Note that there is an index in the margin at the right hand side.

Sunday, 29 January 2012


The letter from the Financial Times to David Bone, Jr was somewhat obscured by the prolixity of the answers, so we reproduce it here so that any interested readers can more clearly see what the reporter wrote.
Dear Sir,

I am a reporter for the Financial Times specialising on UK Companies.

I was contacted in the past weeks by investors in your partnership named Collins & Bone, which was run by yourself and your cousin, Liam Collins.

Based on documents revealed by these investors, including email correspondence between investors and yourself, promotional material distributed by Collins & Bone and my own research, it appears there are serious concerns about the propriety of the business you’ve been running.

It appears that cash invested by investors has disappeared. Further, it appears that inaccurate information has been disseminated to the public and to investors that had given those invested a false impression of Collins & Bone’s affiliates and protections. This includes giving the appearance that your business was FSA regulated, which it was not. 

Further, I believe that investors may still be at risk from questionable business practices by a company with which you are intimately involved in, Castle & Gatehouse, whom you refer to as your “sister company” in correspondence with investors and for whom you are listed as “sales director” in promotional material. That company is currently operational and actively seeking investors according to its website.

Here is a breakdown of the information we gathered that supports the questions that follow below.

FSA regulation and misleading advisory listings

In promotional material for Collins & Bone and Castle & Gatehouse, Chesterman Capital is listed as the Fund Operator:

From Collins & Bone brochure (FAQ’s section):
“Every aspect of the Fund has been validated externally by third parties and it is FSA authorised through their partners Pointon Yorke [sic] and Fund Operators Chestermans.”

I have contacted Chesterman Capital. It confirms that in 2009 they created one vehicle called CBS No.1B for you but that fund never raised any capital and was later dissolved. Chestermans has reviewed the advisors section of Castle & Gatehouse’s promotional brochure. It appears that section was copied from the document created on the basis of that relationship, which they said never raised any money and ended their relationship with Collins & Bone and its affiliates.

Pointon York SIPP Solutions Limited said it had detailed discussions commencing in late 2008 with representatives who went on to form CBS Property Management Limited, which led to the launch of CBS Fund No.1 LP in June 2009. They added that this fund did not complete and was withdrawn in early 2010 with no funds raised and since has had no business dealings with you or other principles.

Since neither fund confirms any money was raised, it appears that investors were misled and or given the impression their investments would be in FSA regulated funds.

From Castle & Gatehouse brochure (Advisors section):
Operator: Chesterman Capital Ltd

I have contacted other members including Harrods Bank, Royal Bank of Canada Trust Corporation Limited and Piper Smith Watton LLP regarding the promotional material dispersed which claims they are affiliated with Castle & Gatehouse. They categorically deny any affiliation to Castle & Gatehouse.

Why were these companies/firms listed as advisors for Castle & Gatehouse? Please clarify.

It appears as though the advisors are listed to give Castle & Gatehouse a sense of legitimacy, but those listed deny knowledge of Castle & Gatehouse in its entirety.

Further, the single vehicle structured for Collins & Bone was never used but every investor I have spoken to felt that these assurances were legitimate.

What then happened with the over £1m that was raised by the firm? Please clarify and explain.  (This question was not answered on the blog.)

Relationship with Castle & Gatehouse
Based on the due diligence section of the Castle & Gatehouse brochure, the management structure section of the brochure, and emails obtained from investors, we are left to conclude that your role in Castle & Gatehouse was beyond that of a normal employee.

It appears that you, after referring to them as your firm’s ‘sister company’, you may have been pooling assets between Castle & Gatehouse and Collins & Bone. It appears monies raised from investors may have been transferred into Castle & Gatehouse. Please clarify.

Debt-free asset security and general collateral:

In promotional material sent to investors in a Collins & Bone brochure entitled “Collateral”, you write the following on page 2:

“An opportunity to invest in 12 month fixed income 8% Guaranteed Promissory Notes secured against debt-free property assets. The product takes advantage of current market conditions to capitalise on low prices, strong demand and the lack of traditional finance”

On page 3 of that brochure, you list the following among reasons why to choose your firm:

“Guaranteed promissory notes used to fund 100+ pre-order investment property development.” And “Debt-free assets back promissory note in full.”

It appears that the investors were given the impression that their investments would be backed by debt-free assets. Was that the case? If not, please explain.

Further, in an email dated 18 March 2011, you wrote the following to investors in Collins & Bone following an open day, in which you sought to allay investor concerns over late interest payments:

“Your capital is safe and both David and I have our own homes as collateral to protect your assets as well as 27 other assets and the trading inside our sister company (Castle & Gatehouse) also acts as security with future contracts worth in excess of £3m at present. So we have both cash profits from trading, real bricks and mortar as well as rental income from the portfolio to secure your investment. I know on the day there were a few of you who had concerns over the liquidity of the company and rightly so as many property companies have had severe problems in the recession. As explained we have an excellent product built to not only survive a recession but built to thrive in it.”

It appears that investors were reassured that their investments in Collins & Bone were secured by 27 assets plus Liam’s home and your own.

Was that the case? Were there any cash profits?

Further, was any equity in your homes available? What is the status of those assets? If they were valueless, why did you tell investors their investments were secure?

Investments in Collins & Bone and Number of Investors
How much money has been lost? What were the assets? How is it possible that the entire investment of over £1m was spent?

Further, you have said that you transferred over £2.5m in profits into debt following the collapse of CBS Group/Investments. Please explain what exactly you mean by this.

Student HMO Lettings Ltd

I have seen a copy of a liquidation letter sent to creditors of Student HMO Lettings, one of your former companies. In it, creditors are stated to be owed £1.678m but there are only a small amount of assets, including some furniture purchased below value by David Bone on the company’s books. Did Student HMO Lettings, of which according to Companies House you were listed as a director, ever have any assets? If yes, what happened to those assets? If no, how did the company let to students?

I now present some further specific questions:

1) Please list the ‘debt-free’ assets which Collins & Bone promissory notes issued and purchased by investors were backed against.

2) Did Collins and Bone purchase any new homes as it promised investors in its marketing literature? Please provide details, if so.

3) Have the mortgage lending banks repossessed any properties which to our understanding were held in the Collins & Bone “fund”? If no, what is the status of those properties you make reference to in notes to investors?

4) How much money did Collins and Bone raise from investments, and the prior company, CBS, raise from investors? From emails, you have written that £4m was raised from a pool of over 130 investors. Are these figures accurate?

5) Can you confirm that 130 investors existed? Why do you later say there are only 28?

6) What did you do with the £4m raised if you did not purchase any new properties? Were these funds used to finance the 10% return payments promised to investors?

7) Did you tell investors that in order to achieve your metrics for their guaranteed 8-10% annual interest payments, you needed a 25% return on your investments? If yes, please provide documentation.

8) Did you tell investors that part of the capital you were investing would be used to finance interest payments owed to earlier investors? If yes, please provide documentation.

9) It appears the money that Collins & Bone raised from investors was used to refinance the personal property portfolio for you. Do you agree that this is what has happened?

10) What is your relationship with Castle and Gatehouse?

1 comment:

  1. My comment on the FT article is reproduced here:
    "In early 2009 C&B were unable to return to me £7,500 loaned to them on a promissory note, returnable on 30 days' notice. That C&B were liable was confirmed by a judgement in my favour at Lambeth County Court (nevertheless I have yet to see the money). Yet according to your article C&B accepted 'investment' money from Jasmine George in 2010. Something not quite right here."